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European VAT News

European VAT News – May 2019

By June 5, 2019July 10th, 2021No Comments

On 01/04/2019 a 6% reduced VAT rate became applicable to supplies of plants for the purpose of creation and maintenance of gardens.


On 01/04/2019 a 6% reduced VAT rate became applicable to supplies of plants for the purpose of creation and maintenance of gardens.

In this context, the Parliament also approved a bill to extend the 6% VAT rate to the supplies of electronic publications, bicycles and e-bikes.



Amendments to the applicable rules were introduced, clarifying that calendar years in which assets are not used must be excluded for the purpose of calculating the periods at the end of which no adjustments for input VAT deduction are required (20 years for immovable property and 5 years for other qualifying assets and services).

An adjustment must be made when the asset is no longer used for business purposes. Effective 13 July 2019, the term for the adjustment of input VAT deducted will be interrupted and suspended for each calendar year during which the movable goods or the immovable property, respectively, are not used for business purposes.


Czech Republic 

Amendments introduced to the Czech VAT Act are set to become effective, in its majority, on 1 April of 2019. The main changes are:

  • implementation of simplification rules for small businesses providing telecommunication and digital services;
  • implementation of Directive (EU) No 2016/1065 regarding the definition of voucher and identification of single-purpose and multi-purpose vouchers;
  • changes to the rules on providing tax documents, including debit and credit notes;
  • changes to the VAT bad debt rules.



Germany has committed to cut the VAT rate applicable to e-books from 19% to 7% and hopes to implement this from 1 January 2020.

This follows the EU Council’s proposal to allow EU member states to cut rates on electronic publications to match their printed equivalents.



The bill implementing the EU Directive 2016/1065 on the VAT treatment of vouchers has been adopted by the parliament and set to be applicable retroactively as from 1 January 2019. A new article has been integrated in the Greek VAT code to include the definition of voucher and the distinction between single-purpose and multi-purpose vouchers.



The Italian government is trying to avoid increasing the country’s standard VAT rate from 22% to 24.2%, this increase is scheduled for January 2020.

Due to Italy having the second highest level of debt in the European Union, they previously agreed with the European Commission (EC) to increase their VAT rates if certain budgetary targets were not met.

It now seems that even though these targets will not be achieved, the current Italian government are adamant that the VAT rate in the country will not increase as agreed.



Poland has confirmed that it will delay the planned mandatory split payment regime for companies involved in business-to-business (B2B) sales within certain sectors prevalent to VAT fraud, until January 2020. 

Once introduced the split payment procedure will mean that customers of the businesses affected will have to pay the VAT amount of a sale directly into a special government supervised bank account, while paying the net amount directly to the supplier. The tax authorities can then monitor the bank account and make withdrawals in order to settle the supplier’s VAT liability.



The Portuguese government has delayed the introduction of the new mandatory real-time invoice reporting regime for VAT registered companies that sell to government bodies, until 1 July 2019.

Originally, this was planned to be introduced from January 2019 and will require businesses making these types of supplies, to send their invoices to the tax authorities for checking at the same time as they are issued to their customer.

Once implemented this new invoice-reporting regime should prevent common errors on these types of invoices and prevent VAT fraud in the country. If successful, it will likely be extended to all business-to-business (B2B) taxpayer transactions in the future.



HMRC published a Brief explaining the correct procedure to recover VAT incurred on imported goods where the owner of the goods is not the same person as the importer of record (e.g. when the respective goods are sold just before the importation takes place).

This procedure will become applicable as from 15 July of 2019.


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